(MENAFN- Khaleej Times) Oil's losing streak continued for the fourth consecutive month on Friday, with prices tumbling as another round of monetary stimulus from Japan pumped up the US dollar and pounded a crude market already suffering from robust supply.
US crude dipped briefly below $80 a barrel before paring losses later in the day as short sellers closed their books for the month and took profits.
Pressure came from monthly surveys showing that the Organisation of the Petroleum Exporting Countries (Opec) made almost no effort to curb production this month even as oil prices extended a months-long rout to four-year lows.
Opec's output in October dipped by just 120,000 barrels per day, according to a Reuters survey published on Friday. The downtick was led by Angola and Nigeria, with overall Opec production still hovering 720,000 barrels per day above its 30 million barrels-a-day target.
US and Brent crude fell by nearly a dollar to put them both on pace for the steepest monthly decline since May 2012.
The last time either benchmark fell for four straight months began in July 2008. Brent slumped for six months until December 2008, and U.S. crude failed to rebound until January 2009.
December Brent settled down 38 cents for the day at $85.86, cementing a monthly loss of nine per cent. US crude was down 58 cents at $80.54 per barrel, having lost 11.6 per cent last month.
Opec secretary-general Abdullah Al Badri said on Wednesday the group's output was unlikely to change in 2015 and that he was not concerned about falling prices, echoing the views from several of the group's core Gulf members.
There will be "tough discussions" at Opec's next meeting in late November but the group is unlikely to alter its official quota of 30 million barrels a day, Hans van Cleef, senior energy economist at ABN Amro in Amsterdam, told the Reuters Global Oil Forum.
The Bank of Japan surprised financial markets on Friday by expanding its stimulus program, boosting Japanese equities while raising concerns about the economic health of the oil importer.
"It's a big shot of stimulus. You see Japan basically doubling down on quantitative easing at a time when the US is getting out of the QE business," said Phil Flynn of the Price Futures Group. "What better time to have an impact in the market, to have a big shock value in the system?" The decision also put pressure on the yen, contributing to the strength of the dollar, which rose to a near seven-year peak of 112.22 yen.
Money managers cut their net long US crude futures by 12,163 contracts to 174,257 in the week ending October 28, according to US Commodity Futures Trading Commission data released on Friday.
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